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NEW CHALLENGES IN THE AIR CARGO MARKET

NEW CHALLENGES IN THE AIR CARGO MARKET. Table of Contents. The Metropolitan Washington Airports Authority Washington Reagan National Airport Washington Dulles International Airport The Washington Market Area The Washington Dulles Distribution Center

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NEW CHALLENGES IN THE AIR CARGO MARKET

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  1. NEW CHALLENGES IN THEAIR CARGO MARKET

  2. Table of Contents • The Metropolitan Washington Airports Authority • Washington Reagan National Airport • Washington Dulles International Airport • The Washington Market Area • The Washington Dulles Distribution Center • The Metropolitan Washington Airports Authority and Air Cargo • The Galaxy Alliance of Airports

  3. The Metropolitan Washington Airports Authority

  4. The Metropolitan Washington Airports Authority Manages Two Area Airports – Dulles International and Reagan National • Interstate Compact Between Virginia, Maryland and District of Columbia • 13 Person Board of Directors • 5 - Virginia • 3 - District of Columbia • 3 - Federal • 2 - Maryland

  5. The Washington Region’s Two Major Airports Serve Distinct Needs • Washington Reagan National Airport • Ultra-convenient central location • Metro access • Short haul services • Washington Dulles International Airport • In suburban high technology corridor • Domestic and international services • Hub for United and Star Alliance

  6. Washington Reagan National Airport Plays a Unique Short Haul Role SEA YUL BTV PWM MHT YYZ ALB MSP BOS ROC HPN PVD BUF MKE SYR BDL ACK DTW JFK MVY EWR LGA CLE DSM PHL SLC PIT CMH OMA DCA ORD/MDW IND DAY SBY DEN CVG MCI CRW LAS LEX STL SDF ORF GSO BNA TYS RDU CLT LAX ILM GSP MEM HSV MYR PHX CAE BDA CHS ATL BHM HHH SAV 14 Airlines 73 Destinations 2,641 departures/week DFW JAX MSY IAH MCO PBI TPA FLL RSW MIA Source: Official Airline Guide June 2004 NAS

  7. Washington Dulles International Airport Is an Important Domestic Airport … SEA PDX BTV PWM MHT ALB MSP BOS ROC HPN SYR PVD BUF BGM BDL DTW JFK ABE LGA SCE CLE EWR MDT SLC ORD PHL SMF CMH PIT OAK IAD IND SFO DAY LWB SJC DEN CVG MCI CHO CRW LAS RIC STL ORF ROA GSO BNA RDU LAX CLT TYS LGB GSP MEM PHX CAE SAN CHS ATL 12 Airlines 72 Destinations 2,429 departures/week SAV DFW JAX AUS MSY IAH MCO Star Alliance Route Non-Star Alliance Route TPA FLL MIA Source: Official Airline Guide June 2004 STT SJU

  8. … And a Growing International Gateway for Cargo and Passengers CPH SVO MAN AMS FRA LHR YVR VIE YUL BRU YOW MUC CDG YYZ ZRH MXP IAD NRT ICN RUH CUN JED MEX BGI GUA SJO TAB SAL POS ADD LPB SRZ GRU GIG 18 Airlines 25 Destinations 337 departures/week MVD EZE Star Alliance Route Non-Star Alliance Route 1/2 Stop Through Plane Service Source: Official Airline Guide June 2004

  9. Independence Air Will Reinforce Dulles As A Leading Destination for Low Fare Services BTV PWM MHT ALB BOS ROC HPN SYR PVD BUF LAN BDL SWF DTW JFK CLE EWR ORD PIT CMH IAD IND DAY CRW SDF ORF GSO BNA RDU TYS GSP CAE CHS ATL SAV Notes: Service begins in August to: SAV, GSO, CLE, JFK, CMH, DAY, IND, BDL, PIT, PVD, DTW, SDF Service begins in September to: SWF JAX Source: www.flyi.com, June 2004

  10. Passenger Traffic at Dulles and Reagan National Washington Reagan National Washington Dulles 40 35 30 25 20 15 10 5 0 11.7 12.4 12.9 13.8 20.1 18.0 17.2 17.0 15.7 19.8 Passengers(Millions) 15.7 15.5 15.2 15.2 15.9 13.3 12.9 14.2 16.0 15.2 4th 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Source: Metropolitan Washington Airports Authority, 2004

  11. Dulles Continues its Rapid Growth Today 1962 Washington Dulles International Airport opens 1987 Metropolitan Washington Airports Authority begins operations 1990 United Airlines starts Dulles-Frankfurt service 1991 United Airlines purchases London routes of Pan Am; starts Dulles-London/Paris 1992 First U.S.-Europe open skies agreement with Netherlands 1996 Virgin Atlantic inaugurates services as third Washington-U.K. airline 1997 Star Alliance created by Lufthansa, United and others. Dulles is eastern U.S. hub 2001 bmi British Midland starts services as fourth Dulles-U.K. airline Scandinavian Airlines starts services to Dulles 2002 United Airlines services to Sao Paulo, Buenos Aires link Dulles to South America 2004 Independence Air chooses Dulles as hub for low fare services Alitalia starts nonstop service between Dulles and Milan Malpensa

  12. The Washington Airports Enhance the Region’s Strong Economy Source: Martin Associates, 2002

  13. The Washington Market Area

  14. Washington D.C. is More Than the Center of U.S. Government • Population of Region 5.2 Million: Fourth Largest in U.S. • Third Largest Effective Buying Income Per Capita • The Capital of the United States … AND … • The world’s leading center for biotechnology research • Headquarters for 15 Fortune 500 companies • Best performing large U.S. city for job creation 2000-2004 • Located at the center of the mid-Atlantic east coast road network - a large manufacturing and consuming region • Site of Reagan National and Dulles International Airports

  15. Washington D.C. is Both the National Capital and a Growing, Sophisticated Urban Community

  16. Machinery, except Electrical (SIC 35) includes Computers, Terminals and Peripherals 11,490 Firms 338,335 Employees Electrical and Electronic Machinery (SIC 36) includes Semiconductors, Circuit Boards, and Communications Equipment 3,027 Firms 307,698 Employees Transportation Equipment (SIC 37) includes Aircraft and Aircraft Parts and Aerospace 2,253 Firms 331,170 Employees • 10 States and Washington, DC have a Total of 76,776 Manufacturing Firms • 836 Firms Export by Air • 521 Firms Import by Air Washington Dulles’ Core Air Cargo Catchment Area Includes Extensive Manufacturing of High Value Products Shipped by Air PENNSYLVANIA High Technology Firms and Employment by Industry (SIC Code) DELAWARE WEST VIRGINIA KENTUCKY MARYLAND VIRGINIA TENNESSEE NORTH CAROLINA SOUTH CAROLINA GEORGIA Source: US Census Bureau 2002

  17. POWERTRAIN The I-95 Corridor is Home to Many World Class Manufacturers and Shippers

  18. The Washington Dulles Distribution Center

  19. Dulles is the Undisputed Air Cargo Gateway to the Washington Region 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 321,803 304,113 295,718 293,714 292,594 288,299 267,614 253,854 240,162 229,924 Tonnes 4th 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Source: Metropolitan Washington Airports Authority, 2004 Source: Metropolitan Washington Airports Authority

  20. International Air Freight at Dulles has Grown by More than 900% Since 1980, Far Out-Pacing Total U.S. International Freight Tonnes 160,000 Dulles International Cargo US International Freight RPM Index 120,000 80,000 40,000 0 ‘80 ‘81 ‘82 ‘83 ‘84 ‘85 ‘86 ‘87 ‘88 ‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘01 ‘02 ‘03 ‘00 Source: Metropolitan Washington Airports Authority, Air Transport Association 2004

  21. Dulles Offers an Airfield With Abundant Capacity, With Room to Expand

  22. Dulles’ RFS Serve Key U.S. Markets in Under 14 Hours – From Aircraft Landing to Destination Loading Dock Source: www.mapquest.com

  23. Washington Dulles Airport Offers a Low Cost Business Environment, Compared to Other World Cargo Hubs Such as JFKLower Landing Fees are One Example of IAD’s Savings COST/OPERATION WEIGHT RATE (000) lbs. LANDING TOTAL/YEAR5 New York JFK 606,0001 $5.253 $3,183.08 $496,559.70 Washington IAD 407,7772 $2.504 $1,019.75 $159,081.00 S A V I N G S $2,163.33 $337,478.70 1 Maximum Gross Takeoff Weight, A340-200 lbs 2 Maximum Landing Weight, A-340-200 lbs 3 Landing Fee, effective date for New York JFK, May 2004. $/000 lbs 4 Landing Fee, effective date for Washington IAD, January 1, 2004. $/000 lbs 5 3 Opns/Week Note: Landing fees at JFK and IAD are based on different criteria. JFK on MTOW; IAD on MLW. Source: The Port Authority of NY and NJ, Schedule of Charges for Air Terminals, May 2004; Metropolitan Washington Airports Authority, 2004 Summary of Airline Rates and Charges, January 2004

  24. Dulles Management Works Closely With Cargo Community, Government Agencies • DACMA - Dulles Air Cargo Managers Association • TSA - Transportation Security Administration • USCBP - US Customs and Border Protection

  25. Cargo Handling

  26. Washington Dulles World Cargo CenterAircraft and Air Cargo Handlers

  27. The Metropolitan Washington Airports Authority and Air Cargo

  28. The Washington Dulles World Cargo Center Supports Its Cargo Airlines – Every Pallet and Every Step of the Way • Washington’s Dedicated Cargo Development Program • Assistance with Marketing, Promotion, Problem-solving • Customer-focused – 24/7 • Cargo-friendly, An Advocate for International Air Cargo • Specific Support for Cargo: Washington’s FTD Program

  29. The F.T.D. Cargo Promotion Program:A Partnership with Dulles’ Airlines • Jointly Funded – 50/50 Basis • Flexible Cost-effective Program to Help Stimulate Business • Provides Quantifiable Support for cargo carriers • Builds on a Strong Working Relationship between the Metropolitan Washington Airports Authority and its cargo operators

  30. The Metropolitan Washington Airports Authority Supports the Air Cargo Industry • Provides High Quality and Low Priced Facilities • Attracts All-cargo and Passenger Belly Services • Promotes Forwarder Consolidation at Dulles • Facilitates Cooperative Market Development • Publicizes Cost and Revenue Advantages of Dulles • Liaison Between Airlines, Forwarders, Government • Quality Control of Dulles Services • Intervenes in Route Allocation Proceedings • Ensures That Regulators and Community Understand Importance of Air Freight • Promotes Worldwide Cooperation on Air Cargo Through Galaxy Alliance

  31. Galaxy Alliance

  32. The Galaxy Group of Airports Promotes Air Cargo • Cargo-friendly Airports Around the World With a Common Vision • These Airports Recognize the Unique Needs and Economic Benefits of Air Cargo • Galaxy Seeks Better Environment for Air Cargo Through • Liberalization • Solving “doing business” issues • Common standards • Greater public awareness • Exchange of Information and Ideas

  33. .. Koln/Bonn Fairbanks Stockholm Prestwick Calgary Dublin Manchester Bucharest Hamilton Chateauroux (CHR) Venice Milan Washington Dulles (IAD) Shenzhen Sharjah Casablanca Houston Kuala Lumpur Accra Johannesburg Avalon Galaxy’s Scope and Founding Members In 1999, the Metropolitan Washington Airports Authority, operator of Washington Dulles International Airport, and Chateauroux Airport in France joined together to establish the International Cargo Airport Alliance. February 2004

  34. Conclusions

  35. Air Cargo is a Vital Industry that Needs Proactive Stewardship • Air cargo is important to the Washington Region • The Dulles World Cargo Center is large and rapidly growing • The Center offers high quality and attractively priced air cargo facilities • The Metropolitan Washington Airports Authority promotes air cargo to enhance regional development • The Authority believes international cooperation is a key to the growth of air cargo • The Galaxy Group of Airports provides air cargo-friendly airports a network of support • The Group lets cargo-friendly airports speak with one voice

  36. Richard P. Norris Air Cargo Development Manager Metropolitan Washington Airports Authority 1 Aviation Circle Washington, DC 20001-6000 Tel: 703.417.8754 Fax: 703.417.8892 E-mail: Richard.Norris@mwaa.com

  37. NEW CHALLENGES IN THE AIR CARGO MARKET The Italian Market Air Cargo Conference

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